Page 31 - Ch_10 ITC

Notes:

1) Carnatic music performance by Mr. Prithviraj is not exempt from GST even though consideration
charged does not exceed ₹ 1,50,000 since said performance has been made by him as a brand
ambassador.
2) Services of transportation of students provided to an educational institution other than an
institution providing pre-school education or education up to higher secondary school, are not
exempt.

3) Services provided by a business correspondent to a banking company are not exempt when such
services are provided with respect to accounts in its urban area branch.
4) Tax is payable under forward charge since recovery agent's services are being provided to a person

other than banking company/financial institution/ non-banking financial company.
5) Legal services received by a business entity with aggregate turnover in preceding financial year
exceeding threshold limit for registration (₹ 20 lakh) are not exempt and tax on the same is payable
under reverse charge.

6) As per section 17(5)(b), ITC on outdoor catering services is blocked except when such services are
a) used by the taxpayer who is in the same line of business or
b) provided by the employer to its employees under a statutory obligation.
7) ITC on the services which are used in course or furtherance of business is allowed.

8) As per section 17(5)(a), ITC is not available on Motor vehicle for transportation of persons having
approved seating capacity of not more than 13 persons (including driver), except when they are used
for making following taxable supplies:-
a) Further supply of such motor vehicles or

b) Transportation of passengers or
c) Imparting training on driving such motor vehicles.
Further, as per section 17(5)(ab) ITC is not allowed on services of general insurance relating to
such ineligible motor vehicles.

9) IGST credit is first utilized towards payment of IGST, remaining amount can be utilized towards
CGST and SGST in any order & in any proportion. Thus, net GST payable in cash under the heads
CGST & SGST will vary but the total amount of net GST payable in cash will be ₹ 81,900 in each case.
10) Tax payable under reverse charge, being not an output tax, cannot be set off against ITC and thus, will
have to be paid in cash.

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